Key Points
- Major equity markets around the world continued the positive momentum in October.
- Early month geopolitical tensions in the US faded as positive trade negotiations with China and solid corporate earnings pushed US equites back to near record highs.
- Emerging markets continue to outperform versus developed markets, whilst global small caps underperformed large.
Australian Equities
October saw the S&P/ASX 200 Accumulation Index rise by 0.4%, with seven of the 11 sectors finishing higher. The Materials sector (+4.3%) led the positive gainers, as gold, iron ore and copper all saw price increases across the month, whilst the Energy sector (+3.7%) was also strong. In contrast, the Information Technology (-8.4%), Consumer Discretionary (6.8%) and Health Care (-4.8%) sectors led the declines. The S&P/ASX 200 Small Ordinaries Index continues to rise, up 1.9% in October, having increased 22.8% in the last twelve months vs the S&P/ASX Accumulation increase of 12.5%, as the index continues to benefit from a rotation of capital, particularly into resource stocks.
Clarity Pharmaceuticals Limited (CU6) was the months highest gainer, up 37.6% on positive trial results, whilst Domino’s Pizza Enterprises Limited (DMP) rebounded from negative trading in the months prior, up 35.9% in October on speculation regarding a takeover of the company.
WiseTech Global Limited (WTC) was the worst performer in the month, falling 23.4%, after its head office in Sydney was raided by the Australian Federal Police regarding suspected insider trading by ex-CEO Richard White and three other employees during late 2024 to early 2025. Bapcor Limited (BAP) was also a main detractor down 20.2%, following a poor trading update.
In economic news, the ABS Labour Force report showed new filled positions grew by only 14,900 roles in September, below economist expectations, whilst the unemployment rate rose to 4.5%, the highest since November 2021.
The CPI reading surprised in October, with the annual inflation rate increasing to 3.2% in 3Q25, up from 2.1% in 2Q25, marking the highest level since 2Q24 and ahead of market expectations of 3.0%. This hot inflation reading, ruled out a cut by the RBA in early November, with the market even now questioning if we will see a cut in February next year.
Global Developed Equities
Global equities continued to rally in October, with developed market equities rising 3.3% (MSCI World Ex-Australia Index (AUD)). US equities were strong once again, with the S&P 500 Index climbing 2.3%, now up 21.5% in the past 12 months, buoyed by easing trade tensions between the US and China, and another solid corporate earnings season.
Across developed markets, growth (+4.7%) and quality stocks (+2.4%) outperformed value stocks (+0.1%) for the second straight month, while momentum (+0.6%) gains slowed. Global small caps returned 1.4% in October and continue to underperform.
European equity markets were mixed, but largely positive, with the UK’s FTSE 100 Index rising 3.9%. Germany’s DAX Index rose 0.3%, whilst the FTSE Eurotop 100 Index was up 2.5%.
In Japan, the Nikkei 225 was up materially, gaining 16.7% in the month and following two strong months prior. Markets reacted positively to being elected as Japan’s first female prime minister and president of the Liberal Democratic Party, who is aiming to pursue expansionary fiscal and monetary policies.
In economic news, US annual inflation rose slightly in September to 3.0% year-on-year, up from 2.9% in August, whilst core inflation also fell slightly from 3.1% to 3.0%. Monthly core inflation rose by 0.2% in the month, slowing from the 0.3% in August and July and slightly under the 0.3% expected increase by the market. The Federal Reserve lowered the policy rate once again in October by 25 basis points as it did in the month prior, with the federal funds rate sitting at 3.75-4.00%, in line with expectations. Borrowing costs are now at the lowest level since 2022, with policy makers pointing to downside risks to employment in recent months, whist inflation continues to remain slightly elevated. In what was a slight surprise to the market, Federal Reserve Chair, Jerome Powell, noted that a rate cut in December was not a foregone conclusion, with the ongoing federal government shutdown reducing visibility on crucial data points.
Commodity performance was solid across October, with the S&P Goldman Sachs Commodity Index (USD) increasing by 1.3%. Copper increased again in October, up 6.3% as the incident at Freeport’s Grasberg Copper Mine in Indonesia, continued to weigh on production, whilst iron ore was also strong, rising 4.0% on China strength. The gold rally was maintained, up another 3.7%, whilst oil prices declined by 2.2% as the market remains worried about oversupply.
Emerging Market Equities
Emerging market equities rose strongly again in October, up 5.5% (MSCI Emerging Markets Index (AUD)), outperforming developed markets. In China, the CSI 300 was flat in October, as ongoing meetings between President Donald Trump and President Xi Jinping on trade negotiations were positive for sentiment.
Economic data from China was led by a sharper than expected decline in inflation, with consumer prices falling 0.3% year on year in September, more than the 0.1% expected. GDP growth came in as expected at 4.8% year on year in 3Q25, down from the 5.2% in the previous quarter, whilst industrial production surprised to the upside coming in at 6.5% year on year in September, up from 5.2% in the month prior and expectations of a fall to 5.0%. Finally, retail sales fell from 3.4% in August to 3.0% in September, slightly higher than the expected fall to 2.9%.
Property & Infrastructure
The S&P/ASX 200 A-REIT Accumulation Index rose 0.6% in October, pushing rolling year returns to 7.4%. Global real estate equities fell by 0.8% in the month as indicated by the FTSE EPRA/NAREIT Developed Ex Australia Index (AUD Hedged). Global infrastructure returned 0.5% in October, as measured by the S&P Global Infrastructure TR Index (AUD Hedged).
Fixed Income
U.S. 10-year Treasury yields finished the month 7 basis points lower at 4.08%, as the softer inflation rhetoric led to the Federal Reserve cutting interest rates by another 25 basis points to . 3.75-4.00%. In saying this, Federal Reserve Chair Jerome Powell cautioned the market of another December cut, prompting investors to take back further easing expectations. UK Gilts were the strongest performer among developed government bond markets, with the 10-year yield falling 30 basis points, on a dovish shift by the Bank of England following softer inflation data and a more cautious tone on growth.
Elsewhere, Japan’s government bonds were the worst performer in October, with 10-year yields rising strongly as there is the expectation that new Prime Minister Sanae Takaichi’s expansive policy agenda will increase supply. Domestically, Australian bond yields were flat across October, ending the month at 4.30%. Hot inflation data in the month, ruled out a rate cut in November, with markets now assigned little to no chance of a rate cut in December.
Alternatives
Preliminary estimates for October indicate that the index increased by 2.3 per cent (on a monthly average basis) in SDR terms, after increasing by 1.9 per cent in September. The nonrural and base metals subindices increased in the month, while the rural subindex decreased. In Australian dollar terms, the index increased by 2.5 per cent in October.
Over the past year, the index has decreased by 1.3 per cent in SDR terms. Increases in gold, iron ore, and rural commodity prices have been more than offset by lower thermal coal, coking coal, and liquified natural gas prices. The index has increased by 3.4 per cent in Australian dollar terms.
HFB Private Wealth Portfolio Performance Report
| Portfolio | October Return (%) | Performance Report |
| HFB Balanced 60 | 0.89% | View here |
| HFB Growth 80 | 1.55% | View here |
| HFB High Growth 100 | 1.74% | View here |
| HFB Balanced Income | 1.10% | View here |
| HFB Growth Income | 1.42% | View here |
General Advice Warning
The content in this section is provided for general information purposes only and does not take into account your personal objectives, financial situation, or needs. You should consider whether the information is appropriate to your circumstances and seek professional advice before making any financial decisions. If you require advice tailored to your specific situation, HFB Private Wealth Pty Ltd would be pleased to assist you through our licensed financial services. This content does not constitute a recommendation or endorsement of any specific financial product or strategy. Before making any investment decision, please read and consider the relevant Product Disclosure Statement (PDS). Past performance is not a reliable indicator of future results. No forecast or projection provided by HFB Private Wealth Pty Ltd is guaranteed to occur.
Disclosure
The views, opinions, and estimates expressed in this section are those of HFB Private Wealth Pty Ltd and its representatives, made in good faith and based on information believed to be accurate and reliable at the time of publication. This material is not a substitute for personalised financial advice. HFB Private Wealth Pty Ltd and its representatives disclaim any liability for actions taken based on this content. This content is issued by HFB Private Wealth Pty Ltd, Corporate Authorised Representative (CAR No. 1300026) of Focused Financial Advice (AFSL No. 286219) © 2025 HFB Private Wealth Pty Ltd. All rights reserved. No part of this content may be reproduced or distributed without prior written consent of HFB Private Wealth Pty Ltd.